Toys May Be Harder To Get In Time For Holidays Due To Global Supply Chain Delays
FARMERS BRANCH, Texas (CBSDFW.COM) - The sawdust is flying inside the headquarters of KidKraft, a Farmers Branch-based company best known for children's play sets, kitchens, and dollhouses.
CEO Geoff Walker says employees design and build prototypes here in North Texas, but the final products are made in China and Vietnam before being shipped to the U.S. by sea.
"Getting containers out of China has been more challenging than ever," Walker told CBS11. That challenge is impacting not just toys but furniture, clothing, auto parts, electronics and more.
Millions of items destined for DFW are trapped in a traffic jam at the port of Los Angeles.
According to port officials, before the pandemic there was rarely more than a handful of ships waiting at sea.
Now there are dozens, each holding about a billion dollars in merchandise.
"I think it's going to be really tight getting access to products for Christmas," said Ryan Petersen, the CEO of Flex Port, a global trade company. "The famous example is nobody can get a Playstation 5 right now but you're seeing that happen with much more mundane things [as well]."
The global supply chain is still playing catch-up from pandemic-related disruptions that started in March 2020, when factories shut down and freighters were decommissioned.
By that summer online ordering rebounded, with spending remaining strong ever since. That's led to a shortage of shipping containers, causing prices to explode. "Last year a 40-foot container cost $3,200," said Isaac Larian, the CEO of MGA Entertainment. "Now it's a bidding war. Who pays the most? It's gone up to twenty-two, twenty-three thousand dollars." Larian is now using air freighters to try and get his toys to store shelves.
Walker estimates his costs are up 10-15% this year.
RELATED: North Texas Retailers Predict Supply Chain-Related Shortages Through Holidays
Another challenge for companies around the globe: the lack of materials.
Electronic components, wood and resin for plastics are all in short supply.
"Chasing those raw materials as costs go up are one of the key challenges heading into the holidays," said Walker. "We're fortunate at KidKraft in that we don't use a lot of electronics so we haven't been hit by the chip shortage, too."
He also says getting to dry land is just the first step.
"It's offloading containers at ports, then finding chassis that the containers go on to ship to warehouses, then finally unloading," he said. "Every one of those has a problem along the way where there are limited employees available."
Walker says there will be fewer of some KidKraft products to choose from this year, so he is telling parents to start buying now.
"Make sure you shop early this year," he warned. "October is going to be key because those key products that you have to have for your kids.. by Black Friday [they] will be gone."